The Risks of Retirement

What Are the Challenges You Face? Knowing Them Helps You Prepare for a Happy Retirement

by Gary L. Fisher

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In the wake of the bubble bursting in 2000, many American companies stepped back and took a long, hard look at the structure of their pension obligations. For the first time in a very long time, the real risks of making long-term promises to employees in the face of plummeting asset values, increasing competition, and volatile markets became quite real, as many companies were either careening towards bankruptcy or already in the throes of a meltdown. Others feared that they might be next.

As a result, many firms chose to move the obligation (and risk) for retirement planning away from the rms and on to the backs of employees. is was a seismic shift, as retirement planning had always been referred to as a ‘three legged stool’, consisting of pensions, social security, and personal savings and investments.

When the next bubble hit in 2009, it only exacerbated the problem. Personal savings fell, and even more firms faced bankruptcy, went out of business, or laid people off.  Millions lost their homes, their jobs, and their pensions. The shift to defined contribution plans, instead of defined benefit plans, had finally reached critical mass. Many people started to understand fully that, if they were to retire as their parents and grandparents had, they would have to figure it out on their own.

The primary issue is one of education and understanding. What should we focus on when it comes to retirement planning? Just as important, what are the risks we face when doing so? An article in The Harvard Business Review, “The Crisis In Retirement Planning (Harvard Business Review, July – August 2014), summed it up nicely when it stated, “Our approach to saving is all wrong: We need to think about monthly income, not net worth.” This statement comes from the article’s author, Robert C. Merton, Nobel Prize winner.

My 23 years of practicing in the retirement planning arena had long ago convinced me that monthly income is indeed the critical factor in retirement success. I would also say that personal health and fitness, both mental and physical, is the second half of the retirement happiness equation.

However, having adequate monthly income is often the precursor to health and well-being. In fact, the American Psychological Association’s “Stress In America” survey results for 2014, shows that 72% of adults report feeling stressed about money at least some of the time, and 22% say that they experience ‘extreme stress’ about money. Top reported triggers include: paying for unexpected expenses, paying for essentials, and saving for retirement. (American Psychological Association, February 4, 2015; American Psychological Association Survey Shows Money Stress Weighing on Americans’ Health Nationwide).

According to APA CEO and Executive Vice President Norman B. Anderson, PhD speaking about the study: “Regardless of the economic climate, money and finances have remained the top stressor since our survey began in 2007. Furthermore, this year’s survey shows that stress related to financial issues could have a significant impact on Americans’ health and well-being. Indeed, stress about money and finances has a significant impact on many Americans’ lives. Some are putting their health care needs on hold because of financial concerns. Nearly 1 in 5 Americans say that they have either considered skipping (9 percent) or skipped (12 percent) going to the doctor when they needed health care because of financial concerns. Stress about money also impacts relationships: Almost a third of adults with partners (31 percent) report that money is a major source of coflict in their relationship. So, solving these retirement income challenges is crucial, if we are to have any expectation of a long, healthy, and happy retirement. There are seven key risks that retirement income planners have to take in to account if we are to properly prepare.

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Each of these risks are real for each of us to varying degrees. e manner in which you approach solving them, and properly planning for adequate monthly income, can make all the difference when it comes time to make work optional in your life. Structuring a retirement income plan can have many moving parts, so it’s crucial that you have a thoughtful plan in place that takes each one of these risks in to account.

Let us help you navigate this mine field and create a plan that makes sense for you and your goals. For a complimentary consultation to review what you are doing to prepare for an appropriate retirement income, call us at:

to set an appointment.•







The Sunscreen Song

The Sunscreen Song

by Gary Fisher

It was known as ‘The Sunscreen Song’. A hit song in 1999. by Baz Luhrman , it offered sage advice to the ‘Class of 1999’. The tune went to #10 in the states, and was #1 in the UK. To this day it stands as one of the most unusually catchy songs of a generation. The lyrics are the key, and they present a dramatic, yet understated line of thinking for the last class of the 20th century.

As I move through my 50th year on earth, and work with clients yet to know the joys of hitting the half century mark, and many who have long since passed that point, I am reminded of the song and it’s advice, and how spot on it was. In fact, I recently ran across a similarly conceived set of instructions purportedly written by 60 year olds. The comments essentially dovetail with the Sunscreen song which I found to be rather intriguing.

Quality advice can be particularly valuable when it comes to envisioning a life that includes business and personal success, raising a family, taking care of ailing parents, fluffy kitties, happy dogs, yourself, your spouse, and then planning for something called ‘retirement’ which might span 20, 30, and even 40 years.

So if you are near a computer, or you have the song on your ipod load it up and take a listen. You may find it moving, or fun, but its hard to imagine it won’t resonate.

Among the gems of advice are:

  • Don’t worry about the future. Or worry, but know that worry is as effective as trying to solve an algebra problem by chewing gum.
  • Don’t be reckless with other people’s hearts, and don’t put up with people who are reckless with yours.
  • Don’t waste time on jealously. Sometimes you’re ahead, sometimes you’re behind. The race is long, and in the end it’s only with yourself.
  • Floss.
  • Stretch.
  • Don’t feel guilty if you don’t’ know what you want to do with your life. The most interesting people I know, didn’t know what they wanted to do at 22, and some of the most interesting 40 year olds I know still don’t.
  • Be kind to your knees. You’ll miss those when they’re gone.
  • Whatever you do, don’t congratulate yourself too much, or berate yourself either. Your choices are half chance, and so are everybody else’s.
  • Get to know your parents. You never know when they’ll be gone for good.
  • The older you get the more you need the people who knew you when you were young.
  • Travel.
  • Don’t expect anyone else to support you. Maybe you have a trust fund or a wealthy spouse, but you never know when either will run out.
  • And of course….wear sunscreen!

And…in my opinion…here are some recommendations from the ‘Over 60’ crowd:

  • Eat and exercise like a diabetic heart patient with a stroke, and you’ll never actually become one.
  • Pay your bills and ‘stay the hell’ out of debt.
  • The joints you damage today will get their revenge later.
  • Stuff is just stuff. Don’t hold on to material objects. Hold on to time and relationships.
  • The most important person in your life is the one who agreed to share their life with you. Treat them as such.
  • No matter how long or how short you live, you’ll wish you took better care of your body when you were young.
  • A true friend will come running at 2am. Everyone else are just acquaintances.
  • Don’t take life so seriously. Even if things seem dark and hopeless, try to laugh at how ridiculous life is.

When it comes time for you to wrap up one phase of your life, and move in to the retirement phase you’ll find that this advice will be particularly resonant.

The formula for my Happy Retirement “Sunscreen” is based on countless studies, personal observation of nearly a quarter of a century in practice working with clients, and the words of those same clients it seems clear that your happiness in this phase of life will include four critical components:

  1. How healthy you are physically and mentally.
  2. The fun you have with your hobbies and most importantly, your passions.
  3. The depth and quality of your personal relationships.
  4. The level of contribution to others you are able and willing to make.
  5. The monthly income you have that facilitates the previous four points.

Interestingly the advice to the graduating class of ‘99, the wisdom of the 60 + crowd, all blend in to one neat package that serves as a nifty guide to what we should all focus on as we make our plans for the BEST of our life. Heed it well!


Finding Your Beach

The Journey Starts with That Important First Step

by Gary L. Fisher


‘Find Your Beach’ is a metaphor that I use liberally to define both the journey and the destination to what we call ‘retirement’. It’s not about stopping your life and remaining in stasis. Rather, it’s about transitioning your life from one state of mind and being, to another. It’s about new beginnings, not endings. It’s about new challenges, not the ending of all challenges. It’s about conquering new goals, exploring new frontiers, and seeking adventure and fulfillment.

The destination can be an actual beach, or whatever you picture yourself doing in retirement, whether it’s spending all of your time with your grandchildren, fishing off a dock in Northern Michigan, or seeing the world. So the first step is setting a goal: getting clear about what you want to achieve. Most important of all is knowing about why you want it. Then you need a path that is designed to lead you there.

Think about it: No ship sets sail without a plotted course, no jet takes off without filing a flight plan, no football team takes the field without a game plan, and no family or business should contemplate a successful journey without some sort of focused, holistic, and comprehensive strategy. My role is to help people create such a plan and then help guide them through the realization of that plan, year after year, until you find YOUR beach. I approach all of my client relationships with the idea that we are in it together…and we’re in it for the long haul.

People can be confused, intimidated, or even annoyed by trying to figure out just what exactly it means to work with a Financial Advisor and address such a broad topic as ‘your financial life’. After all…it sounds like a big job…and it is, but that shouldn’t scare you. In fact, I hope it inspires you! Conceptually, it’s pretty easy to visualize, and in the end, the results can be orders of magnitude more valuable than the effort and energy that went in to it’s creation.

Creating a road map for your financial game plan can be one of the most exciting, and empowering things you’ll ever do. Some of our clients say it provides them with a sense of accomplishment second to none. It’s no wonder…how would you feel if you no longer were alone in planning for your retirement, long term care, or managing your investments on a day-to-day basis?

The process starts with a simple and complimentary consultation where we determine if you need help, if we should work together, and if so, at which level of service. Then, we start plotting your course. At subsequent meetings, we formally implement your plan, and thereafter, we meet to review and make course corrections as needed.

It’s simple, and it’s easy to get started. Ancient wisdom says that ‘the journey of a thousand miles starts with but a single step’. When you, or someone you care about are ready to take that first step I’ll be ready to lend a hand.

If you are ready to take that important first step, please give me a call! 810.603.9100

Retirement Reality Check

Let’s Take a Look at the Costs of a “Bare Bones” Retirement

by Gary L. Fisher

Golden Piggy.jpgAmong the myriad of considerations we have to examine when it comes to planning for a sound and happy retirement are the basics. Things like health care, prescription drugs, long-term care, food, clothing and shelter. That sounds like a tall order, and it is. Certainly those are things that range from stuff we’d rather not think about, all the way to stuff we take for granted.

The most elemental of these factors is food. Gotta eat to live right? You cut that out of the budget and you won’t have to worry about a long retirement! So what does the potential for food expenses look like during your retirement? Let’s take a look:

If you and your spouse live to your life expectancy of age 83, and if you retire at 65, you’ll eat 39,430 meals in retirement. That’s breakfast, lunch and dinner, 365 days a year over 18 years for two folks. If each of these meals costs a mere $5 you’re looking at a budget of $197,100 on food. If you want to eat something other than Ramen noodles and Chef Boyardee in retirement, let’s make it $10 per meal. Now our budget is nearly $400,000! 

What are your odds of living long enough to spend that kind of dough on food? Well, according to the Social Security Administration, one out of four 65-year-olds will live past the age of 90.  One out of ten will live past the age of 98.  So that’s a lot of Early Bird specials at Denny’s to plan for.

How about “working until you drop”, as I’ve heard some proclaim that they will do? Sounds good…well actually it sounds pretty awful…but it’s probably not something that most could do even if they wanted to. In truth, 41% of Americans retired earlier than they planned for various reasons. Health issues are usually the culprit. This situation is exacerbated greatly when people either have no long-term disability insurance through work, or privately purchased. Or they have it, but it’s inadequate. Of course, sometimes people have just had enough of work, and believe it or not, age discrimination is a real thing. Bottom line?  Planning on being the 85 year old guy at the office isn’t really much of a plan.

Like food, the out-of-pocket costs for medical expenses can be astronomical, as well. According to Fidelity, $220,000 is the amount of money a couple can expect to pay for health care in retirement. 

Lastly is the reality of long-term care. I could write a book about this one, and maybe I should. Since this is a topic most people enjoy as much as a funeral, I’ll be brief. The facts are: 7 out of 10 people over the age of 65 will need some form of long-term care at some point in their lives. Medicare does not pay for long-term care insurance.  According to the most recent Genworth Cost of Care Report, the cost of a semi-private room in a long term care facility is $90,703. The average cost for Assisted Living facilities is $43,200 per year. At a 4% increase per year rate (which Genworth say’s it is currently in Michigan) these costs will double in 18 years.  That’s a cost that few are prepared to handle without a plan.  (Source 2015 Genworth Cost of Care Survey @…/cost-of-care.html)

I don’t know a lot of people who love to buy insurance….okay I don’t know anyone (myself included) who actually enjoys paying premiums. However, when compared to the costs of being unprepared there’s really not much to think about if you have the health and wherewithal to take action. Similarly, when it comes to planning for retirement income. The roadblocks are clear: Health considerations, living longer/longevity risk, inflation, and taxes all play a part. We could also toss in common issues like providing ongoing financial support for children, divorce costs and expenses, paying for aging parents, and unpredictable government intervention and geopolitical events. In truth, no one sane plans to fail, but countless people fail to plan. It’s really human nature. None of us want to confront our own mortality. But to do so can become a liberating, and life–affirming move. Mitigating our risks of living longer than our money can be a smart move in uncertain times.•